Vol. VIII, No. 5, September-October 2008

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1. Editor's corner
2. In the news
3. Our design team includes LEED Accredited Professional
4. The role of entertainment in shopping centers & malls
5. All time record births
6. Bowling goes upscale
7. Chuck E. Cheese's same store sales grew 4.5%
8. Time for leisure, the latest data
9. Kids snacking exotic flavors
10. Current projects

[ Index of Previous eNewsletters ]

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Middle research review section of article The Role of Entertainment in Shopping Centers & Malls article

A 1996 study by Haynes and Talpade of four different U.S. malls with 30,000 square foot and larger family entertainment centers (FECs) found:

• 7% of mall customers said the primary purpose for coming to the mall (on the day surveyed) was the FEC. These visitors did not differ in income from customers coming to the mall for other primary reasons.
• 25% of customers who came primarily for the FEC also cross-shopped in the mall's other stores. They spent about 75% of the amount that shoppers coming primarily for shopping spent.
• Customers who visit mall entertainment centers are more likely to be visiting as a family with children 12 years and younger (72%) versus only 20% of mall customers who did not visit the FEC.
• 75% of families that visited the mall also visited the FEC.
• FECs are more likely to draw shoppers who spend time at the mall stores rather than shoppers who visit the department stores.

The researchers concluded that the entertainment centers do seem effective in drawing younger families visiting malls more for social and entertainment purposes and that FEC customers spend additional time at the food court and mall stores.

Two studies by General Growth Properties during the same time frame found that 10% of mall customers cited the FEC as the primary purpose for their trip.

These studies do show that FECs act as anchor attractions for young families, however, based upon the research findings, the impact on the sales of department stores and mall stores were low.

Three studies have looked at the impact of cinemas on malls. A 1996 survey by the International Council of Shopping Centers (ICSC) found that movie theaters drew in potential shoppers who otherwise wouldn't have been exposed to the mall and that 60% of movie patrons shopped in the mall during their movie visit, spending an average of 35% of what all mall shoppers spent.

The ICSC then conducted a second study in 1999 that found:

• 52% of moviegoers' trips to the mall also involved visits to other mall stores.
• Moviegoers spent one-third as much on retail and food items as shopper-only mall visitors.
• Movies attract younger audiences than general shopper traffic.
• Moviegoers and non-moviegoers have similar incomes.

Ooi and Sim conducted a study of nine Singapore malls in 2003 to examine the draw of cinemas on malls. Some of their key findings were:

• The presence of a cinema was the 5th ranked important reason for choosing a particular mall to visit after proximity, variety of tenants, management and promotions and complementary services such as banking and food court.
• 72% of customers interviewed felt that the presence of a cinema would entice them to visit a mall more often.
• 25% said that they were at the mall to see a movie.
• Regular cinema patrons spend the same amount on average elsewhere in the mall as mall visitors who are not frequent cinema patrons.

The researchers concluded that cinemas do function as an attractor by increasing mall traffic (footfall) and the sales of other mall stores.

A 2000 study by Kang & Kim examined the cross-shopping in a large open-air power center and an 800,000 square foot enclosed mall located near each other in the greater Toronto, Canada area. The power center had two mega-theaters with 42 screens in total. The mall's cinema had 10 screens. Findings from that study included:

• The average distance that entertainment customers traveled to the power center was 11 miles versus an average of 4.4 miles to the mall.
• 45% of the power center entertainment customers had incomes of $70,000 or higher compared with 30% for the mall.
• The power center had a higher percentage of professional and 30-year and older entertainment customers than the mall.
• Food-entertainment cross-shoppers generally spent up to two hours at both locations, with the power center showing slightly higher average times.
• Fast food accounted for 88% of food-related cross-shopping at the mall while full-licensed restaurants were the most frequently reported form of food-related cross-shopping at the power center (55%).
• The power center was a major entertainment destination whereas the mall was more a shopping destination.

The value of mall entertainment in a broad sense has been examined by three studies. In 1998, Eastlick et al. surveyed adult shoppers on cross-shopping behaviors at two entertainment and retail focused malls in Phoenix, Arizona and San Diego, California. They found that both entertainment-oriented shoppers and cross-shoppers are seeking fun and enjoyment through their mall activities, whereas shoppers pursing particular goods and services are generally not drawn to entertainment activities. They found that regardless of the shopping motivations, positive experiences translate into a higher probability of repeat business and that entertainment can be part of an effective strategy to increase visits and shopping center profitability.

In 1999, Christiansen, et al. examined the effects of mall 'entertainment value' from the consumers' perspective on mall profitability. Consumers basically defined entertainment as some activity that provided a diversion or relief from normal day-to-day activities and could include movies, theater, people watching, entertainment-retail stores, shopping itself, restaurants, bars, and even the architecture and interior design of the mall itself. The study found evidence that demonstrated that there is a positive relationship between entertainment and mall profitability and value.

In 2001, Kang and Kim conducted surveys at three malls in San Diego, Cleveland and Atlanta to examine the impact of 'entertainment as motivation for shopping.' Their survey asked mall patrons to rate "The main reason I visited this type business was:

• 'A' for shopping or for finding what I needed.
• 'B' for experiences or environments that are enjoyable and entertaining.
• For both A and B."

Shoppers who indicated 'B' or both 'A' and 'B' where classified as being a high entertainment motivated shopper.

Findings from that research found:

• More female than male shoppers indicated a high level of entertainment as motivation for shopping.
• Shoppers with a low level of education tended to have a high level of entertainment as motivation for shopping with the exception of cinemas where the ratio was reversed and customers with a college degree or higher had a high level of entertainment as motivation.
• The amount of time and money spent in department/anchor stores, children's apparel/toy/specialty stores, accessory/fashion stores, craft/housewares/home furnishing stores and mall common area stores was higher for shoppers with a lower level of entertainment as motivation for shopping.
• The level of entertainment motivation for shopping had no impact on the amount of cross-shopping.
• Shoppers who perceived a high level of enjoyment usually spent more time on shopping than those that experienced a low level of enjoyment.

A 2005 study by Eppli and Tu examined the impact of 39 mall renovations and expansions between 1995 and 1997 on the performance of in-line retail stores. Some of the expansions were entertainment-based with theaters, restaurants and major bookstores. They found that although entertainment-based expansions did not significantly result in an increase in the per square foot sales growth rates for in-line stores, it did increase aggregate sales and thus helped the mall by establishing its presence of being the dominant regional mall and enhanced its brand image.

These research studies, although clearly showing there is a positive relationship, don't present any quantified conclusion about the overall impact of FECs, cinemas or entertainment value in general on mall traffic and store sales.

One factor that needs to be considered when examining the impact of entertainment on shopping centers is the nature of the shopper and the shopping trip. A 2003 study by Sit, Merriless and Birch in Queensland, Australia looked at just that.

What that study found was that there are six distinct shopper segments with different motivations and varying levels of importance on entertainment. This means that you cannot really evaluate the impact of entertainment based on all shoppers or by demographic or other common characteristic. Rather, you have to examine the impact based on the type of shopper and the trip purpose.

Dominant Demographic Characteritics of Shopping Customer Segments

Two pro-entertainment segments were identified - the entertainment shopper and service shopper - who are seeking entertainment. In contrast, two anti-entertainment segments are the serious shopper and the convenience shopper.

The Queensland study also found that few studies have examined food as a distinct attribute that impacts a shopping center's image. The authors said, "food and entertainment are pivotal to shoppers because they create an entertaining ambience within a shopping center conducive to a pleasant or exciting shopping experience and provide a needed break from hours of shopping and/or as a conclusion to an extended shopping excursion."

A 2004 study of shoppers in three areas of the U.S. by Hu and Jasper that examined the differences between men and women mall shoppers also found distinctive shopper types. One was hedonic shoppers who view shopping as a way for entertainment and emotional experiences that breakdown into two categories based upon their motives:

• Social shopping that relates to having fun with family and friends
• Idea shopping-shopping as a way to explore new surroundings and learn about products and service offerings and new trends

Other insights from their research that relates to entertainment were:

• Consumers expect malls to provide not only merchandise, but also entertainment and fun - what might be called a shopping experience.
• More women than men enjoy malls.
• Although both men and women enjoy a mall as a place for socializing, men, unlike women, do not consider the mall as a place for relieving stress or providing relaxation.
• Men tend to be utilitarian shoppers, shoppers who perceive shopping as a way to get necessities and also as a chore, and impulse shoppers, whereas women tend to be hedonistic shoppers and planned shoppers.
• To appeal to men, malls should include experiential value to enhance the shopping experience.

Clearly, the motivation for visiting a mall or shopping center varies for different people and also is based upon the trip's purpose. Sometimes 'entertainment' will increase the center's appeal or be the motivating reason for the trip.

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